The idea from intrinsic, which comes from the Latin word intrinsĕcus, is used to rate what is proper to something. The intrinsic, therefore, turns out essential or indivisible of the element in question.
For instance: “The banknotes do not have an intrinsic value: without trust in the authorities or social agreement, they are nothing more than papers”, “Anxiety is intrinsic to big changes”, “Violence is an intrinsic problem in any society”.
Intrinsic to philosophy and economics
In the field of philosophy, the intrinsic is that which, by virtue of its nature, corresponds to a certain object. This means that the intrinsic is one’s own and is not given by the relationship with another.
In the context of economymeanwhile, the concept of intrinsic value. This is what the market value of a precious metal which is used for coin a coin. Suppose an ounce of gold costs 500 dollars and that a coin is minted that presents said quantity of the metal: the coin, in this way, will have an intrinsic value of 500 dollars. The legal value of the currency, on the other hand, is established by a social pact: the promise of payment of the entity that mints it is trusted. The coin that contains one ounce of gold (500 dollars), to mention a hypothetical case, may have a legal value of 800 dollars, a figure that is not linked to its intrinsic value.
The real value of an asset
Intrinsic value is also the real value of an asset or a company. Said value arises from the perception of its real value taking into account all its intangible and tangible aspects. This intrinsic value may or may not coincide with the market value.
In this framework, there are many ways we can follow to carry out the calculation of the intrinsic value of a share. Broadly speaking, the four methods Most used by experts are the following: cash flow discounts; those based on equity value; relative valuation; those that are based on real options. The first of them is the one that theoretically offers the greatest precision of all, although in each particular case it is necessary to evaluate which of them best suits the needs.
Synonyms and antonyms of intrinsic
We must point out that this term is not very common in everyday speech, although it does appear in the media, especially in the field of economics. That said, we can take a look at some of its most used synonyms: own, internal, essential, characteristic, peculiar, inborn, basic, intimate, privative and exclusive.
Regarding their antonyms, we can mention the following three: improper, accidental and extrinsic.
The inherent and the immanent
As with many other words, Spanish speakers often confuse the meaning of intrinsic with others, in particular with inherent and immanent. Although these are three words with very similar definitions, they have their differences and for that reason it is advisable to know them thoroughly to know in which case to use each one.
The Royal Spanish Academy points out in his dictionary that the term inherent it is defined as something that, given its own nature, is linked to something else in a way that cannot be separated from it. It also points out that in the field of grammar it is understood as a Unit It is independent of the relationships it has with others within the sentence. Let’s see these two meanings in the following examples: “These obligations are inherent to your job”, “In the noun wardrobe, the masculine gender is inherent”.
With respect to immanent, the dictionary defines it as something that is inherent to a being or that is linked to its essence in a way that is impossible to separate, although we can distinguish both parts by means of reason.